Good day, ladies and gentlemen and thank you for your patience. You joined the Merit Medical Systems Q1 2017 Earnings Call. [Operator Instructions] As a reminder, this conference maybe recorded. I would now like to turn the call over to your host, Chairman and CEO of Merit Medical Systems, Mr. Fred Lampropoulos. Sir, you may begin.

And thank you and thank you ladies and gentlemen for joining us. We are broadcasting from our corporate offices in Salt Lake City and we appreciated this busy time of the earnings season. I have taken the time to join us. First thing I would like to do is to have Brian Lloyd, our General Counsel read our Safe Harbor provision. Brian?

Thank you, Fred. During our discussion today, reference maybe made to projections, anticipated events or other information, which is not purely historical. Please be aware that statements made in this call which are not purely historical maybe considered forward-looking statements. We caution you that all forward-looking statements involve risks, unanticipated events and uncertainties that could cause our actual results to differ materially from those anticipated in such statements. Many of these risks are discussed in our annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission available on our website. Any forward-looking statements made in this call are made only as of today’s date and except as required by law or regulation, we do not assume any obligation to update any such statements whether as a result of new information, future events or otherwise. Please refer to the section of our presentation entitled Disclosure regarding forward-looking statements for important information regarding such statements. Our financial statements are prepared in accordance with accounting principles, which are generally accepted in the United States. However, we believe certain non-GAAP financial measures provide investors with useful information regarding the underlying business trends and performance of our ongoing operations and can be useful for period-over-period comparisons of such operations. The table included in our release and discussed on this call sets forth supplemental financial data and corresponding reconciliations to GAAP financial statements. Please refer to the sections of our presentation entitled Non-GAAP Financial Measures and Notes to non-GAAP Financial Measures for important information regarding non-GAAP financial measures discussed on this call. Readers should consider non-GAAP measures in addition to not as a substitute for financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some items that affect net income. Finally, these calculations may not be comparable with similarly titled measures of other companies.

Brian, thank you very much and ladies and gentlemen thank you again for joining us. We are gathered here along with our operating staff and with Bernard Birkett, our Chief Financial Officer, who will weigh in just a few minutes. I think you can see by our press release and our report on the success that we had in the first quarter. Revenue growth on the core basis, up 11.7% is in my opinion extraordinary. You can also see that non-GAAP earnings of $0.28 a share as well. And I think of course these three important issues again our gross margin on a non-GAAP basis was 48.3%. So I think all of the metrics that we all look at and that we have promised have been delivered in this quarter. It was an exciting quarter with a lot of things going on and not only did we have to run the business, but we had a couple of acquisitions that we have to do due diligence. With the first of the year, we had a lot of sales meetings and so the activity level at the business globally was very, very, very busy. There are couple of things that I want to make note of that you will need to pay some attention to and then Bernard will clarify this, but on some of the accounting issues as they pertain to our acquisition of Argon. So Bernard will get to that in a minute. But listen, I could go on and on and talk about sales growth. We can talk about the margins, we can talk about the earnings, we can talk about all of those things which I think speak for themselves, but the real effort is done by their staff. And numbers are numbers, but those numbers don’t develop and become what they need to be without a lot of hard work. And so I would be remiss if I didn’t really thank the staff that’s sitting here for the efforts they took traveling globally whether it be Singapore or Europe, there is a lot of work done and I think results that will please you. Now, I think without further ado, I am going to ask Bernard to weigh in and go through all of the financial levers and add some clarity to some points that you may have an interest in. Bernard?

And thank you, Fred. So in Q1, worldwide revenue was $171.1 million and $172.3 million on a constant currency basis, that’s up 23.9% as reported on 24.8% on a constant-currency basis over Q1 2016. Q1 core revenue was up 11.7% over Q1 ‘16, core revenue was up 12.6% on a constant currency basis. Q1 GAAP gross margin was 44.4% compared to 43.5% in Q1 ‘16. Q1 2017 non-GAAP gross margin is 48.3% compared to 45.9% in Q1 ‘16. This increases combination of change in product mix and also realization of production efficiencies that we have been working on for over the last 12 months. Q1 2017 GAAP EPS was $0.32 compared to $0.10 in Q1 ‘16. And on a non-GAAP basis, EPS was $0.28 compared to $0.19 in Q1 ‘16. And our GAAP numbers include legal expenses of $4.8 million in Q1 related to our DOJ response and the GAAP numbers also include a preliminary bargain purchase gained in acquisitions we made from Argon, which represents $0.27 of the GAAP EPS that we have experienced in the first quarter. And this gain and the legal expense have been excluded from our non-GAAP numbers. And as a result of the bargain purchase gains, we will be adjusting our GAAP guidance for 2017 that will go from a range of $0.54 to $0.60 to $0.80 to $0.86 as I said as a result of that preliminary gain that we have experienced. And just to finally comment on the public offering that we completed in March. In the public offering generated net proceeds of $136.5 million, the purpose of the offering was to reduce our debt balance and to create additional flexibility. And total proceeds were used to pay down debt and this was split between all revolver and term loan. And I think that’s it from me. Fred, I will handle back to you.

And Bernard, thank you very much. Well done, well done. Couple of points of interest. We plan on delivering an update on our 3-year plan by adding 2 years in our next quarterly report. We are preparing that. We are reviewing it. And we are actually very excited. We think that, that particular exercise has been something that’s been very important for the staff and every employee in the business to focus on what we have promised and all of our decisions are made based on the commitments that we have made to shareholders. So, we look forward to that. It’s the appropriate time we think after this quarter to do so and that will again be updated at that particular time. I would also like to just let you know that we reaffirmed our guidance of $713 million to $723 million in that range. And we also reaffirm our earnings on a non-GAAP basis of $1.15 to $1.20. Now, the reason I think that’s important to understand, we – as Bernard pointed out, we recently issued shares and we are not lowering our guidance because of those shares. We are maintaining that guidance. And I think that speaks for itself. I think that – we – our people are asking questions about why you did an offering, why you did this, I think that Bernard, I think, answered it sufficiently, but again, we are happy to be able to take and reaffirm that earnings number at $1.15 to $1.20 on a non-GAAP basis. Just overall ladies and gentlemen, the business is operating. And I think one of the parts that it is gratifying is the plan that we put in many years ago and were often asked about this. Well, what’s happened in the last 18 months? And I think you have seen the results quarter-by-quarter of these improvements, but I think it’s also important to be reminded that we put capacity plan in place several years ago and we could see the growth, we could see the opportunities globally and we spent a lot of money and put a lot of capital structures in place. And had we not done that very candidly, we just couldn’t grow at this level. So this is not a 3-year plan or an extension of 2 years, this is a 7-year plan in which we did a lot of work to set the stage for this performance. And now what you are seeing is our CapEx continues I believe and Bernard just we didn’t hear our CapEx for the quarter on schedule?

Yes. We are on schedule. We are on target for the guidance that we have given for the year.

Okay. So all those things, I think are very, very important in terms of where we are spending our money, both in maintenance and new projects, but not any large capital expenditures out there. And so we continue to believe that we are going to see a continued absorption as our business continues to grow and as we work towards those goals that we have set forth for the year. There is – as you look across the product lines and the growth, we see a lot of areas and products that are getting a good acceptance and particularly a reminder that we launched five new products in January. We are just getting a little bit of a contribution from those products at this point, but they are starting to ramp up. And so we are confident and the numbers that we have given you in terms of our core growth and overall business going forward. And again, we just look forward to reporting that continued plan, if you will at the end of the second quarter. Well, that’s about all that I have. I mean I think there is plenty here. There is – but anything else I would add would probably distract from what ought to be looked at. So Bernard, do you want to add anything before we close?

No. I think we will just open it up to questions.

Okay, very good. Ladies and gentlemen, we will now turn the time then back over to our administrator and we will – we are sitting here ready for your questions. So here we go. Let’s turn it back over.

Thank you. [Operator Instructions] Our first question comes from the line of Larry Biegelsen of Wells Fargo, your question please.

Good afternoon guys. Thanks for taking the question and congratulations to the strong start – to the year. Fred, I wanted to start with the quarter and maybe a little bit more color on what drove the upside relative to consensus in the quarter, can we talk about what the contribution was from DFINE, HeRO, Argon and CCI and the strength in standalone devices catheters and CRM? And I had a couple of follow-ups. Thank you.

Okay. Larry, I will go ahead and start and then I will have Bernard weigh in on some of the contributions by the units. What we did see in the quarter was a lot of strength coming back in from our international dealers. When we hit some of the oil resets here, a year, 18 months ago, we saw a slowdown in Russia and Saudi Arabia and some of these locations. So we saw a resurgence of business in these areas that would be one. Our OEM business, which has been relatively quiet the last several years in the low single-digits, surged. And a lot of this because of some of the newer products like the Prelude SNAP, that’s being used by one of the major EP companies on an OEM basis. And so it’s coming from that area. Our Endotek business, although the smallest part of our contributors grew substantially and we expect that to continue to grow actually at higher percentage levels as we go forward. So that would be another contributor. And then we saw growth across the board as you pointed out in standalone devices and catheters. So if you look at the business areas and the geographic areas, China continues to grow in Southeast Asia at our levels of approximately 20%. So we are getting a lot of contributions in first quarter, which candidly is a little surprising to see all of these kind of all hit at once. But Bernard let me some time over you and have you go through the specific contributions by the various groups.

Okay. So Argon, CCI contributed about $9 million in revenue, DFINE $7.1 million, HeRO $2.2 million. And as Fred said, we have seen growth across all product categories apart from custom kits and procedure tray and across all geographic markets and we saw strong growth as well. So everything all of that combines that led to the very strong revenue number.

Larry, let me just add some color to the custom kits and trays. It’s a business that is out there. It’s an important part of our business, but with all of the new products and the higher margin products, we have directed and incentivized our sales force to sell these other products. So we would expect to continue to see that to be flat simply because it’s not where we are focusing our business. I know that you are relatively new to the story Larry, but let me just say there is a lot of elasticity in that particular area if we wanted to be, again because of the margins, our preference is to have our guys work on these newer products. So I hope that answers your first part of your questions.

It does. I didn’t hear you mentioned SwiftNINJA, any color on that, Fred?

Well, it’s – it continues to ramp up in the United States. I think that we did in the quarter about $1 million. Remember, we just launched it in late January, so about $1 million of contribution. I still think that when we get done with the end of the year, it’s going to be star product. And also Larry, another thing just important is that we have the – this PAE thing that – approval that we are waiting for, we still haven’t received it, so that’s going to be another big impedes for the business both for the embolic business, but particularly for the SwiftNINJA, so.

And just a clarification, on PAE Fred, can you talk about whether it’s a PAE label or BPH treatment indication and I know you have a study going on in that area, any update on the PAE study and the potential market opportunity?

Yes. This will far go and remove the PAE study. So it will eliminate that expense. This will give us a de novo approval for our Embosphere to be used in the treatment of BPH. So that’s – and again, we have been waiting for this for quite some time. We have been answering questions and responding back to the FDA. And as much as I know, imminent seems to be – our imminent seems to be months, but it could be literally any day and that’s a significant I think business opportunity for us.

That’s exciting. Let me transition to the guidance. You left the guidance unchanged. Why did you leave the guidance unchanged given the beat, was there something about the first quarter that was one-time in nature or is there something Fred, that you are seeing that makes you cautious on the second quarter through fourth quarter?

Well, the slide Bernard said, everything was hitting on all cylinders, which is there is always something that’s a wry in a business in some location or whatever. And we just like to be conservative, Larry. And I think as we have approached that second quarter, we will look at how did we do there. We will look at that – the extra 2 years. Adding that on, we probably at least are considering an Investors Day. But we just think one quarter, with just not enough visibility for us to go ahead and literally stick our necks out there. So we will do it when we are absolutely confident that we can beat and whatever it is that the level and we want to be fair. But at the same time, I don’t want to stick my neck out there and disappoint anybody. When we are ready and we are very confident and everybody in this room raises their hand in the square then we will go ahead and adjust.

Okay. Last one for me, but just before I just want to confirm, there is nothing that you thought was one-time in the quarter and there is nothing that you are seeing right now in the business that’s making you cautious, is that fair, Fred?

Well, I am always cautious. I talk and I am a salesmen, but I am always cautious, Larry. But no, we are not seeing anything that’s out there that would alarm us and cause us to just say we are not doing that because there is something that scares us. So we don’t see anything like that at all. And again on the earnings side, I mean I think without adjusting that, we said we are going to still be in that upper not the range, but the initial range and that includes the additional shares. So I think that is in effect, upgrade of our thinking there from the dilution. So we are essentially going to absorb that, which I think is in of itself not a bad thing.

That I agree. So lastly for me and I will jump back in queue. How are you thinking about your appetite for M&A going forward post the financing and are there any area of interest or areas of focus that you are willing to share with us? Thanks for taking all the questions.

Thanks. Larry, there are a lot of opportunities out there. There are lot of people who are shuffling their portfolios there as we are all aware, issues with Becton Dickinson and with Bard and you have got – you have the Abbott, you have all of these things out here. Medtronics recently sold some things off. And some of those things are going to pop-up. And in fact, we have seen a couple of opportunities that have come out of those situations that we look at. We look at I would think right now, we have at least five deals that we look at. I probably rejected 10 almost initially. So there is a lot of opportunities out there. But again, here is the critical issue for us. We want to be able to provide a value proposition for our customers. We want to be able to keep the commitments to our shareholders and to our employees. So it has to meet a lot of parameters. And we are not out here just taking a look at a bunch of swingers just taking down whatever things have to fit into the business area. And we are just trying to make sure that we take advantage of the opportunities, but we have plenty to do and plenty of opportunities are right in front of us. But it doesn’t mean we won’t look and that we are in fact looking all the time, so.

Thank you for taking the question.

Thank you very much Larry. I appreciate it. It’s good to have you onboard, Larry.

Thank you. Our next question comes from Matthew O’Brien of Piper Jaffray. Your line is open. Matthew O’Brien: Thanks for taking my questions. Just a follow-up on a couple of Larry’s questions, Bernard the maintaining of earnings despite the dilution that you are going to be experiencing from the capital raise, can you just give us a sense of where some the excess leverage is coming from?

Well, if you look at obviously into the earnings from the first quarter and then look at what’s out there for Q2 to Q4. And based on the level of dilution there, I think we have made up some of the grounds that we, particularly in the first quarter that would have helped with absorbing some of that dilutions on an annual basis. That will be the primary area. And again – and based on the strong start to the year, I think that gave us confidence that we could and maintain that guidance of 115 to 120. Matthew O’Brien: Okay. I guess just given the gross margin softness in the quarter and I would love to hear a little bit about what caused that and I think it might have been the OEM business really perking up, but just given that softness we saw there you still had a good bottom line trends and then maintaining…?

So we are – no, we are just – we are a little bit concerned about what the use of word softness. I mean we went from the previous year of 45.9 to 48.3 and that doesn’t seem very soft to me. And maybe we are misunderstanding Matt. Matthew O’Brien: Yes. My apologies [indiscernible] calls, so I may have miscalculated that, but it’s just like a little bit lighter than I think I was calculating but not by much, I was expecting might be an adjustment. So let me move on and that DFINE number in the quarter, I think you did $6 million in Q4 last of year and you just did $7.1 million, so very strong sequential improvement there and it was traditionally seasonally soft quarter, so we would love to hear about some of the traction that you are seeing there and how we should think about that line item going forward?

Yes. So – as you know Matt, we brought this in July of last year. And then we went through a transition that took us all the way through the end of the year and in fact, we dismissed over 100 employees as we took and put and merged the businesses together, we shutdown offices. And I think the softness in the fourth quarter was a bit of the – there were people leaving and maybe not at attention to customers that was necessary. Well, now that things have stabilized, we saw a better first quarter. Some – our MX product is starting to ramp up, which is a product that uses a Merit inflation device as the piston in that particular device, which is by the way just for you historically what got us interested in it because they were using a Merit device that really made a difference and the outcomes are in the performance. And then I think the other thing that we are doing is that we – we have started R&D projects. And we have a number of things, so – that are in the wind so to speak. And I – my belief is that we will have a major product out on the market by the end of the year. And then I think that we will have several other products as we have now Meritized and are doing that, that’s my word, but Meritizing is getting people understand our R&D projects to get engaged. We have had a number of focus groups and then we march down the road, so some of businesses that we bought have not done R&D projects for a long time. They were maintaining and trying to hang on and doing this and then what Merit does whether…

I am not going to say meaningful, because we don’t know enough about their strategies and that sort of thing at this point. But I will say if we look historically, number of these larger transitions, whether it would be Boston and Guidant or whether it would be this or that, we always see cardinal in quarters. We always kind of see that it takes them a while and then they have strategies and people are leaving and the kind of what we saw with DFINE, when you have these things, there is going to be some consequences initially. It’s not just all roses. And so there are some and what we have done is we have gone and looked at all of their products, all of our products, looked at what clause is over, look at our strategies. And so we have already started even though I think this is what just Sunday night, we are already looking and plowing and doing all the things that we think that we can put together plans that in fact we are benefited. Now, meaningful means, I mean that’s a big word, I would say that we are going to be doing things that will give us opportunities to continue to grow the business. Matthew O’Brien: Very helpful. Thank you.

And they may turn into meaningful and they do I will be the first one to tell you. But we are going to get there first. Matthew O’Brien: Got it. Thank you.

Alright. Thank you, sir.

Thank you. Our next question comes from Jim Sidoti of Sidoti & Company. Your line is open.

Hi Fred, they changed my name.

Hi Jim, how are you doing?

Alright, how are you.

Good Jimmy.

Can you talk a little bit about the legal expenses in the quarter, is that something we should expect going forward or you think take down a little from Q1?

And I actually think they are going to take down a bit as we move out through the year. By the way, this was all part of our original guidance. So this – but we put it in there because we wanted many things that we are avoiding it. This is the lowering up and this is the part of what we have delivered a million documents, it’s just part of the process. But that being said, I mean – go ahead, Bernard, you want to weigh in?

Yes, I would agree with that. A lot of the heavy work had to be done in first quarter and we expect that to reduce throughout the rest of the year. So based on what we see right now and we would expect those expenses to take down.

Alright. And then now that you have completed the offering, what should we assume for interest expense and share count for the rest of the year?

On the interest expense, you are probably looking at about between 2.5% and 2.8% interest cost.

So, what would that be? Now that you paid it down, what would that be in dollars per quarter?

Yes. I have got about $2 million a quarter. I got in that range. And the share count is going to 49.6, no, it will be 50.

50, okay.

Just over 50.

Okay, 50 million share count. Alright. And can you just give me a little more color what is a bargain purchase gain?

Jimmy, I was hoping you would ask the question. I said there will be one guy in this call that would ask that question will be Jim Sidoti, but this is going to be an interesting one. Go ahead, Bernard, because it’s a fun to talk about.

So essentially, it’s when you buy an entity or buy an asset and the fair market value of that asset is greater than the amount that you actually pay for us. So then we have to go in and value all of the assets. Obviously, we are working through various advisers with valuations on the assets and liabilities. And then if the net of those is greater than what you pay for the asset, then you have a bargain purchase and you have to recognize it through your income statement for GAAP – on a GAAP basis. So, it’s really non-cash, but it’s just where the accounting has to be recorded.

And Jim, we spent more time on this. And again, these are requirements from our accountants as well as external advisers who review this stuff. So, we don’t make this stuff up, but the essence of the question is that the assets were more than we paid for they make you write this up on a one-time issue? It is a preliminary number. It cannot be adjusted as – and remember, this just took place I think in February.

February. So we have had a lot of work done in the quarter and there is still some more work to be done in that. We are going obviously – we will be through that in the second quarter, but it just takes time.

And I don’t want to say it’s meaningless. I mean, it’s something unique we have never dealt with before, but something that was required, but again, in the big picture, it’s an entry. Is that a fair statement?

Yes, it’s an entry. It takes time and we want to make sure that it’s 100% accurate and that’s what we are doing. We spent a lot of time and effort on this and taken a lot of advice to make sure that it’s correct and that’s where our focus is.

Did you ever see one before Jim? I have never – we have never.

No. Usually, it’s the other way. They are writing things down. They are not pulling things down.

Yes, I know. We have had a few of those over the years too. So, anyway, okay, alright. Jim, anything else?

Thank you. No. Numbers speak for themselves.

Okay. Thanks Jimmy.

Thank you. [Operator Instructions] Our next question comes from Jayson Bedford of Raymond James. Your question please.

Good afternoon. Thanks for taking the questions, guys. Just a few quickies. You launched the 5 products in January, little surprised that you mentioned that there weren’t bigger contributors in the quarter. Just to be clear, the expectation is that these products will grow and become bigger contributors throughout the year, I don’t mean to state the obvious, but I just want to reaffirm...

Yes. And I think I hope I didn’t give any impression that somehow that these aren’t winners, because they are. They are going to be big, big players. I mean, whether you take the NINJA or you take the SYNC or you take the elation pulmonary balloons, all of the various products that we launched are going to be big. When you launch something in the quarter – I think what I was trying to point out, Jayson, is the growth that we saw across the board geographically for our products wasn’t because of just these products, that, that’s where substantial growth in these products will come into all of them and each one of them is a winner. So, we know that for a fact. But you have to get inventory, you have to get out there, everybody has to do their trials and has to go to the back committees and all this sort of stuff. And we are having a lot of fun and we are making an impact in the market. But there wasn’t a lot because we have the sales meeting in January – late January, February. That gives you 60 days. And in the meantime, management is out running around doing all these things and traveling to facilities worldwide. So, it has all of our focus, the sales guys are on it, they are like hunting dogs. They have got the sand. And I got a report yesterday from a hospital on the East Coast, where they did 11 cases yesterday of the Prelude Sync and the docs and the nurses just love it. We are hearing that everyday. So I am pleased and thank you for the questions, so that I can clarify it that these are all going to be winners and big contributors – and maybe equally important is their contributions from a gross margin point of view. These are products that have 65% and up to 80% gross margins. So as they grow, they are going to be contributors to our efforts on the gross margin side. So, thank you for asking that question, so I could clarify it.

Okay. And that’s actually a good lead in maybe for Bernard. You reiterated the gross margin guidance for the year, first quarter gross margin, I thought was quite strong. I realized that Argon and Catheter Connections probably weigh on margins a bit, but was there anything kind of one-time in nature that helped the first quarter gross margin?

I don’t think there wasn’t anything one-time in nature. I think we got a really good product mix in the first quarter. And again that’s something that we have been focusing on and we are seeing strong growth in our embolics and SwiftNinja made an impact. DFINE was strong again in the quarter, which helped on the margin side. We see our elation balloons coming into play. So, there is a lot of factors helping to contribute to that margin. And just then on the operational side, we are driving a lot of efficiencies. We are seeing better utilization of our facilities given that we had higher output. So, it’s a combination of all those factors together supporting that margin growth.

And Jayson, if I could, we have had a couple of facilities that were performing like we’d like them to. And I think to the credit of operations group, Ron Frost and his guys, Peterson [ph] and many others, Clay Creamer, the group that’s responsible of this, we have turned those around. We particularly have seen that in our Houston facility, our [indiscernible] and Texas facility. And I think we have talked in the past about how those were kind of not performing at the level that we needed them to and we turned them. So I think that’s a strong opportunity going forward to improve those gross margins and those contributions. So as Bernard said, it’s coming from a lot of areas, but there were some pretty fundamental things that we did that I think will really help all areas. I mean, particularly, the gross margins going forward, but like I said, it’s coming from a lot of areas and that’s the way it ought to me. And so it is just one issue.

Okay. Last one for me, just on Argon and Catheter Connections, I think the previous assumption was they would contribute together kind of low $40 million range. You were bit ahead of what we were thinking for the first quarter. Is low $40 million kind of the still the rough number for – or the expectation for ‘17?

Yes, that’s what I would still be guiding towards. There maybe upside within that, but that’s what I will be guiding to right now as particularly as we continue to integrate the sales force for that business and make changes there. And just as Fred said, some of that business, again, is changing, switching over to us in May and we are moving into a direct base business. So giving all of those factors and the consolidation that’s taking place in that area, I think that number is reasonable.

Thank you.

Okay. Jayson, anything else?

No. That’s good. Thank you.

Okay. Thank you, sir.

Thank you. And next question comes from Charles Haff of Criag-Hallum Capital. Your line is open.

Yes, this is Lucas Baranowski on for Charles Haff. And you know looking at the way your operating margins have expanded year-over-year, we were just wondering if you could talk a little bit about your kind of longer term goals on operating margin maybe where it could get to over the long-term?

Yes. Lucas, I hate to disappoint you, but I think what we want to do is, we want to get to the second quarter. We went up to one more quarter of these new acquisitions and look at their contributions. And I think that we will do that at the end of the second quarter and will expand out an additional 2 years beyond. So I think as much as I would like to answer the question, I think it would be best settled in our second quarter call and we will start taking a look at what our goals would be, our CapEx, earnings, we will do all of that stuff. And very likely by the way at an Investor Day Meeting we may do in New York, those are kind of things that we were just so busy – and it was only the first quarter of these new businesses. So we are just going to have to hold that and advance to the future and then we will bring those numbers forward at the end of the second quarter.

Okay. And then turning to acquisitions, obviously, some of the acquisitions you have done recently have benefited margins. I mean, do you – when you look at other potential acquisitions, I mean, do you expect that once you would do in the future would continue to help expand margins?

Yes. I mean, I think our goal is always again as we look at the plan up to this point where we have had to ask or if we were seeking 100 to 150 basis points of gross margin per year, some of that is going to come in mix, some of that’s going to come in absorption. But in our analysis of these businesses, we look at their contributions. But I think the important part of that is just something that has a high gross margin is not good enough. It has to have the strategy. It has to be able to go to our sales point, use all of the other skill sets that Merit has distribution, point-of-sale, consistency and building out product lines. It should have to have a lot of factors for us to consider them as well as value proposition. So listen, we like the way the business is moving. We – I think, I guess, I could say we are on a role. I mean, this is what our sixth – is our sixth or seventh quarter?

Sixth.

Sixth. But here is the real key, is everybody that’s sitting in this room, there is 30 to 40 people sitting here with me. The great thing about setting these goals and putting them out there is everybody in this organization and everybody in this room is like a hound dog. I mean, they are focused on those goals and everything may do as well as everything that we review has to meet that corporate goal or we are simply not going to do it. It has to meet the test. So that’s the best way, Lucas, to answer your question.

Yes, thanks. I think that answers it.

Very good sir. Thank you. It’s good to have you on board too, Lucas and give my best to Charles.

Yes, of course.

Thank you. At this time, I’d like to turn the call back over to management for any closing remarks.

Well, first thing we would like to do is again thank all of you for taking the time. I know it’s busy and we were very I think aware of trying to keep this call as concise and to the point as possible. Bernard and I will be here for the next couple of hours. And if there is some clarification on some of these points, we will be happy to do that. And so we will be here. Thank you again. We look forward to reporting in the future. Thank you for your continued support and good night signing off from Salt Lake City. Best wishes.

And ladies and gentlemen, that does conclude your program. Thank you for your participation and have a wonderful day. You may disconnect your lines at this time.